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What is a Zero coupon bond?
A zero-coupon bond is a bond bought at a price lower than its face value, with the face value repaid at the time of maturity. It does not make periodic interest payments, or have so-called "coupons," hence the term zero-coupon bond.
The interest rate on a bond is called?
The interest payment is called the "coupon" and it is usually a fixed amount per year, which is set when the bond is issued. But when you buy a bond on the market for a price that is different from the original face value, the effective interest rate is called the "yield". The reasons why the yield might be different from the coupon rate are described in the related link called Bond yields and coupon.
What do you call annual interest the issuer promises to pay on the face value bond?
The coupon rate.
Why do savings bonds sell for less than their face value?
Savings Binds have to mature for years before they are at their full value. Once they have matured you can either cash them in for their face value, or save them and allow them to collect interest.
The amount of a promissory note is called the?
face value
What is funding at par?
means the federal government would pay off its debt at face value, plus accumulated interest.
Maturity value of an interest-bearing note payable is the?
Face value plus interest.
Are interest rates on government bonds usually calculated on the face value of the bond?
The interest earned on government bonds is calculated on the face value of the bond plus the interest that has been earned on the bond.
Why did Alexander Hamilton propose paying the entire national debt at it's face value?
To restore the nation's economic credit so that the government could raise money in the future.
How are interest on a bond calculated?
Know the bond's face value, then, find the bond's coupon interest rate at the time the bond was issued or bought, then, multiply the bond's face value by the coupon interest rate it had when issued, then, know when your bond's interest payments are made, finally, multiply the product of the bond's face value and interest rate by the number of months in between payments.
How is interest on a bond calculated?
it is calucated on the face value of the bond
How interest is calculated on bonds?
it is calucated on the face value of the bond
How is the interest on a bond calculated?
it is calucated on the face value of the bond
The basic formula for computing interest on an interest-bearing note is face value of note x annual interest rate x time in terms of one year equals Interest?
(Face Value of Note) x (Annual Interest Rate) x (Time in Terms of One Year) = Interest
Can the cash value ever be more then the face value?
No that I have seen or read anywhere but the bigger the cash value the bigger the debt benefit proportionally.
What is a Zero coupon bond?
A zero-coupon bond is a bond bought at a price lower than its face value, with the face value repaid at the time of maturity. It does not make periodic interest payments, or have so-called "coupons," hence the term zero-coupon bond.
How can bonds issued by two companies paying same contractual interest rate be issued at different prices?
To calculate present value of the bond you also need to know market interest rate. If , for example these companies were issuing their bonds in the different time and market interest rate was different then bond could be sold at premium(the bond will cost more then its face value), par (same as face value), and discount (bond will cost less then face value.)
